Acquisitive Melbourne-based fund manager Fawkner Property has acquired Townsville’s Willows Shopping Centre for $212 million, adding to its high-quality Queensland retail portfolio.

The sale of Willows Shopping Centre was exclusively brokered on behalf of Dexus represented by Nick Willis and Sam Hatcher from JLL, and Jonathan Fox and Carl Molony from Stonebridge, following a formal Expressions of Interest campaign.  

Simon Rooney, CBRE’s Head of Retail Capital Markets – Pacific, acted on behalf of the purchaser Fawkner Property to negotiate the transaction with Dexus Wholesale Property Fund (DWPF).

The centre, owned by the Dexus Wholesale Property Fund and managed by Dexus recently underwent a significant refurbishment and expansion, including a brand new fresh food precinct. 

JLL’s Head of Retail Investments, Sam Hatcher said “The sale comes as transaction volumes for Sub-Regional Centres track at almost $1.2 billion YTD in 2024, trailing some 55% below the 3-year average annual volume for the sub-sector. The reduction in transaction volumes is being attributed to the limited availability of investment supply as fundamentals of the retail asset class continues to improve. 

Nick Willis, Senior Director at JLL said “We are dealing with are notable increase in capital demand for retail, with the majority of investors who are returning to the sector engaging in the Sub-Regional asset class given the available returns and the land rich nature of these centres. This was evidencedby the depth of capital that engaged on the opportunity.”

Mr Fox from Stonebridge said “Willows is the only centre currently in Townsville to accommodate ALDI, which was a key point of difference. Investors were attracted to the robust nature of the Townsville economy and opportunity to control a 100% interest in a Dominant Sub-Regional asset like Willows.”

Carl Molony from Stonebridge commented “We received strong interest from predominantly local managers who were attracted to the opportunity to secure a 100% interest control in a dominant sub-regional. In addition, we received interest from a high-net-worth investor demonstrating the depth of capital for these assets.”

The Townsville transaction boosts Fawkner’s total funds under management to over $3 billion, with additional retail assets in the pipeline. It follows a national retail buying spree, which has included Queensland acquisitions in Gladstone, Mackay and Cairns.

Fawkner Property founder Chris Garnaut noted, “This is a strategic acquisition, which extends our foothold in central and Far North Queensland and will allow us to capitalise on the synergies of owning a high-quality retail portfolio in a fast-growing market.”

“As interest rates potentially move into a stabilisation phase, private capital, which has dominated this investor space over the past two years, is moving quickly to secure high quality, large retail assets at compelling returns as this window of opportunity begins to close,” Mr Rooney said.

“We have recently seen the re-entry of offshore and now domestic institutional investors into the sub regional and regional shopping centre sector given the compelling returns on offer. This should translate into increased retail sale volumes as we close out 2024 and continue into 2025.”

Fawkner has been one of Australia’s most active acquirers of regional and sub regional shopping centres in recent years.

Since 2021, Fawkner has purchased 11 retail assets totaling $2.1 billion, including Western Australia’s Midland Gate, Karratha City and The Square Mirrabooka; Stockland Traralgon in Victoria; Queensland’s Cairns Central, Mount Pleasant Centre, Stockland Cairns, and Stockland Gladstone; as well as New South Wales centres Settlement City in Port Macquarie and Stockland Nowra.

Willows Shopping Centre boasts a gross lettable area (GLA) of 44,507sqm positioned on a high profile 15.39-hectare site together with an additional development land parcel of 4.42-hectares.

The centre is home to Townsville’s first Aldi and is the only triple supermarket anchored shopping centre, benefitting from significant capital expenditure and development program. This has included the Woolworths and fresh food upgrade and the successful leasing reconfiguration of the ex-Target box which introduced Aldi, TK Maxx, and Planet Fitness.

Willows Shopping Centre is located 11km south-east of the CBD and performs exceptionally well with turnover of circa $360 million (including Aldi estimates), ranked number 1 for total turnover in Northern Queensland (SCN – Little Guns 2023).

Anchored by strongly performing major tenants Big W, Woolworths, Coles, and Aldi which combine for circa 54% of total centre MAT – the centre is underpinned and securely leased to ASX-listed, national and chain retailers, comprising 93% of total tenanted GLA and 85% of gross rental income.

Townsville is the largest city in northern Australia and is key region in driving economic development, underpinned by a large industrial sector, national defence hub, large port destination and a rapidly growing tourism sector. The city is set to benefit from an expansive current trade area of 233,839 residents, which is forecast to grow by 1.2% through to 2041.

Related Reading:

Hawaiian acquires 50% Perth’s Claremont Quarter - CBRE & McVay RE | Commo.

ISPT to sell half-share in Sydney’s Warriewood Square shopping centre - CBRE | Commo.

Dominant regional mall in NSW Riverina for sale - JLL & Stonebridge | Commo.

Sydney Northern Beaches shopping centre for sale - JLL & Stonebridge 

Thriving Busselton Central for sale by Stonebridge and CBRE 

Adelaide’s landmark Westfield Tea Tree centre acquired for $308 million by Scentre Group and Barrenjoey - CBRE  

Vicinity Centres finalises Australia’s largest retail transaction in 2024 $420 million Joondalup deal | Commo.

Strategic $107.5 million Melbourne acquisition boosts HomeCo Last Mile Retail Logistics Fund - CBRE and JLL  | Commo.